USA – Conagra Brands, Inc., a renown meat snacks company, has announced its financial results for the first quarter of fiscal year 2025, which ended on August 25, 2024. 

Conagra’s first-quarter net sales dropped to US$2.8 billion, impacted by a 3.5% decrease in organic sales, a 0.4% reduction due to unfavorable foreign exchange rates, and a 0.1% boost from mergers and acquisitions. 

The organic sales decline was driven by a 1.9% drop in price/mix, largely attributed to strategic investments, and a 1.6% decrease in sales volume. 

The company estimated that manufacturing disruptions in its Hebrew National brand during the key grilling season negatively impacted results by US$27 million.

The company reported a drop in both net sales and operating margins, with earnings per share (EPS) showing mixed results compared to the previous year.

Net sales for the first quarter decreased by 3.8%, while organic net sales saw a decline of 3.5%. 

Conagra’s operating margin for the quarter came in at 14.4%, a 247 basis point decrease from the same period last year. 

On an adjusted basis, the operating margin stood at 14.2%, representing a 244 basis point drop.

Gross profit for the quarter was US$739 million, a 10.2% decline from the prior year, while adjusted gross profit fell 9.4% to US$726 million. 

The drop in gross profit was attributed to lower organic net sales, cost inflation, and unfavorable operating leverage. 

Additionally, the Hebrew National disruptions further reduced gross profit by approximately US$11 million. 

Gross margin for the quarter dropped by 189 basis points to 26.5%, while adjusted gross margin fell by 163 basis points to 26.0%.

The Grocery & Snacks segment saw a 1.7% decline in net sales, dropping to US$1.2 billion. Organic net sales for the segment fell by 1.9%, while mergers and acquisitions contributed a 0.2% increase. 

The organic sales drop was driven by a 0.1% reduction in price/mix, partly due to increased strategic investments, and a 1.8% drop in volume. 

Despite these declines, Conagra gained market share in snacking categories like microwave popcorn, seeds, pudding, and pickles.

Operating profit for the Grocery & Snacks segment dropped by 3.7% to US$249 million, while adjusted operating profit fell by 3.8% to US$253 million.

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